Scottish Government

Annex 6: Monitoring and review of interim scheme - initial evidence

1. This Annex sets out baseline data and recent trends for a number of the indicators listed in Annex 4. Data is drawn from the June Agricultural and Horticultural Census.

Baseline trends; production indicators

2. The baseline data shows a general trend of declining suckler cow and breeding ewe numbers. Compared to the 2005 baseline, the number of suckler cows had fallen by 2.0% (to 2006) and 5.2% (to 2007). The cumulative decline in breeding ewes was faster with a 4.3% decline (to 2006) and 7.8% (to 2007), compared to the baseline 2005 figures.

Table 1: Summary trends in production impact indicators in the LFA

3. The observed trends in suckler cow and ewe numbers will be influenced by a number of factors in addition to changes made to LFASS. These factors include changes in market conditions and levels of support and the impact of other agricultural support schemes. In particular, the influence of the 2003 CAP reform, which saw the decoupling of payments from production, is likely to have been a major driver in the observed production indicators.

4. Simulation based modelling has been undertaken to model the likely impact that the 2003 CAP reform and market prices had on animal numbers (all Scotland) over the observed period using the IMCAPT model ²². It is possible to isolate the likely influences of CAP reform and changes in market prices from the observed decline in animal numbers in the baseline projections. The difference between the projected and actual figures gives an indication of the decline in animal numbers that will have been caused by other factors, including changes in the LFASS. Results are presented in Figure 1 for suckler cows and Figure 2 for breeding ewes.

Figure 1: Projected and actual numbers of total suckler cows in Scotland, 2005-2007

Figure 2: Projected and actual numbers of breeding ewes in Scotland, 2005-2007

5. Any impact of the change made in the interim LFASS would only be expected from the first year that it was announced that payments would be made on a historic basis. It is important to note therefore that the impact of the interim scheme would not be seen until 2006-2007. The analysis suggests that there was a small decline of suckler cows in 2006-07 that cannot be explained by 2003 CAP reform or changes in market prices, and may therefore have been a result of the move to historical based LFASS payments. In contrast, for breeding ewes, the projected decline through CAP reform and market prices has been high in 2006/2007, but also in preceding years. This suggests that there are large declines in numbers of breeding ewes that cannot be explained by CAP reform and market prices, that precede the implementation of the interim LFASS scheme.

Baseline trends; environmental indicators

6. The environmental benefits of LFASS derive from grazing by cattle and sheep. Table 2 shows trends in some of the key environmental indicators that have been identified for the review. The % of holdings in the LFA with cattle fell from 25.4% in 2005 to 24.6% in 2007, a fall of 0.8 percentage points. There was a bigger 1.9 percentage point decline in holdings in the LFA with sheep. The percentage of holdings in the LFA with stocking density below 0.12 livestock units/ha, the minimum threshold for receiving LFA support under the old scheme, has increased from 10.9% in 2005 to 12.6% in 2007.

Table 2: Summary trends in production impact indicators for review of the interim LFASS scheme

7. In terms of regional variation, significant declines in animal numbers have been seen in some parishes in the North and North West of Scotland, particularly for breeding ewes. Figure 3 overleaf gives regional variations in stocking densities to show changes in stocking densities as a proxy for changes in grazing patterns. Figure 3 shows that significant declines in stocking densities are predominantly in the North West of Scotland.

Figure 3: LFA stocking density by parish, indexed change from 2005 to 2007